Senators want probe of Allergan transfer deal with tribe: letter

(Reuters) - Four U.S. senators have asked the Senate Judiciary Committee to launch an investigation into a deal drugmaker Allergan Plc (AGN.N) struck with a Native American tribe to protect some of its patents from generic challenge, according to a letter seen by Reuters.

The Allergan logo is seen in this photo illustration November 23, 2015. REUTERS/Thomas White/Illustration/File Photo

Allergan said on Sept. 8 that it was transferring patents on its dry eye medication Restasis to upstate New York’s Saint Regis Mohawk Tribe, which agreed to exclusively license them back to the company in exchange for ongoing payments.

Allergan said in an emailed response to a Reuters request for comment that it met last week with the staffs of Senators Brown and Hassan to provide detailed briefings on the agreement.

“We would welcome the opportunity to provide additional briefings for these Senators, as well as the opportunity to brief Senators Casey and Blumenthal, and answer any questions they may have,” Allergan said in the email.

The tribe and company have said that the tribe’s sovereign status shields the patents from review by the U.S. Patent Trial and Appeal Board, an administrative court empowered to invalidate patents.

On Friday, the tribe asserted this immunity in an ongoing administrative proceeding brought by generic drugmakers led by Mylan NV (MYL.O), which are seeking to invalidate Allergan’s patents to introduce cheaper versions of Restasis to the market.

Mylan has called Allergan’s deal with the tribe a “sham transaction” and said the tribe should not be allowed to invoke immunity to prevent administrative review.

Some patent lawyers have noted that the patent board has recognized the immunity of state entities like public universities, and tribal immunity is considered to be an even stronger shield.

Generic drug companies often seek to challenge brand-name drug patents through administrative proceedings, which are cheaper and faster than federal court litigation. Allergan has said it would not invoke the tribe’s immunity in federal court.